Mortgage rates fall to 4-year low

Mortgage rates are down for a sixth straight week, a sign that the government’s latest efforts to break up the credit market logjam are working.

The average 30-year fixed home loan rate fell to 5.47% this week -- a four-year low -- from 5.53% last week, mortgage giant Freddie Mac said.

The rate has tumbled from 6.46% at the end of October.

U.S. regulator James Lockhart, whose agency oversees Freddie Mac and Fannie Mae, said Wednesday that the government’s programs to ease the credit crunch could push mortgage rates “well below 4%,” the Associated Press reported. But Lockhart didn’t give a timetable for that kind of drop.

Home loan rates fell quickly beginning the week of Nov. 24. That was when the Federal Reserve said it would commit $600 billion to buy mortgage-backed securities of Freddie, Fannie and other U.S. agencies, trying to pull down yields on those bonds and thus drive down rates on mortgages underlying the bonds.

The Fed telegraphed Thursday that it would buy some Freddie and Fannie bonds today, which could give another downward tug to loan rates.

But the Fed is, in part, just making up for a sudden lack of demand for U.S. mortgage bonds by foreign investors. Those investors have been paring their holdings of mortgage debt in favor of U.S. Treasury issues.

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tom.petruno@latimes.com